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Morning Outlook



Overnight Highlights

·         Euro-zone economic growth averaged 0.4% in the first quarter of this year, up from 0.3% the previous quarter after growth in France and Italy more than offset lost momentum in Germany.

·         The dollar added modestly to yesterday’s losses overnight, while crude oil added to Tuesday’s gains.

·         Soybeans experienced a technical bounce overnight after double-digit losses on USDA’s bearish crop report Tuesday.

·         Wheat added to gains after yesterday’s bearish USDA report failed to break the market and amid hopes that a weaker dollar will boost export demand.

·         Modest losses were seen in corn on favorable weather for the young crop.

·         Showers return to the northern/western Midwest Thursday/Friday and favor the west this weekend.

·         The western Midwest will be driest today, and again from Monday to Wednesday.

·         Eastern areas of the Midwest should only see sporadic showers over the next 10 days.

·         An active pattern in the Plains is expected to keep wetness concerns in place for wheat, facilitating stripe rust spread and development.

Commodity Weather Group Forecast

In the Midwest/Delta, light/scattered showers in the Midwest/Delta were limited to near the Gulf/Southeast coasts, ND, and west-central MN in the past day. Showers return to the northern/western Midwest Thursday/Friday and favor the west this weekend, causing slowdowns to corn/soy seeding in mainly WI/MN/IA/KS/NE/Dakotas.

The west will see a break Monday to Wednesday, with showers favoring the southwest 1/3 of the Midwest again late in the 6 to 10 day. The eastern Midwest will not be completely dry (best rain chances Friday and Monday), but interruptions to fieldwork should be much more patchy and short-lived (particularly in the OH Valley) than farther west. Broader delays to late seeding arrive in the 11 to 15 day across much of the Midwest, but the moisture will aid early growth.

A cool shot on Monday/Tuesday mornings may bring light frost to ND but is unlikely to cause freeze damage to emerging corn. Delta showers will be somewhat hit-or-miss from Friday into the weekend, but the 6 to 10 day trended wetter (especially late in the period). This will threaten some additional flooding in low-lying areas of AR that have been recently wet. The 16 to 30 day continues to inch wetter in the Midwest/Delta, which will need to be watched in the Delta but would aid Midwest crops.

In the Plains, showers were limited to central/southeast TX and a few spots in ND yesterday. A very active pattern in the next 2 weeks will continue to threaten areas of excess moisture in mainly TX/OK over the next 10 days, although the wettest areas may shift to the C. Plains in the 11 to 30 day. Spring wheat seeding remains rapid in Canada in the rest of May, while near-term rains aid N. Plains growth. Showers are also currently bringing needed relief to the Pacific Northwest.

Morning Market Snapshot


All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.




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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

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